Monday, November 16, 2009
Everest Industries
Today's Updates:
1. We have become bullish on Everest Industries. Today's closing price is 131.70. Everest Industries which primarily manufactures Cement Roofs, is an indirect play on growing Rural India / Low cost housing theme where company's products are primarily used. We check last 5-quarter results as below. (Click on image to see larger view):
1. We have become bullish on Everest Industries. Today's closing price is 131.70. Everest Industries which primarily manufactures Cement Roofs, is an indirect play on growing Rural India / Low cost housing theme where company's products are primarily used. We check last 5-quarter results as below. (Click on image to see larger view):
As seen above for Q2 2010 Net Sales is up 20.63% at 136 Cr against 112.74 Cr. Operating Profit is up 87.61% at 18.33 Cr against 9.77 Cr. OPM is expanded at 13.48% against 8.67%. EPS is at 3.16 against Negative 1.61.
Outlook and Valuation:
Everest Industries sells cement roofs and other building construction products for ceiling, wall, floor etc. Company also manufactures prefabricated steel structure which is another area we will see strong growth. Rural India and Low cost housing is favorite theme in market now days. In the coming months with growing construction activities in rural areas we could see strong earning growth from the company. Company showed annual sales jump of 85% for the year 08-09 compared to previous year giving an indication of growth we could see in coming years.
For the full year 09-10 Everest Industries could report sales of about 600 Cr and EPS of Rs. 20-22, which is discounted at PE of just 6 at CMP of Rs. 131 - low for a company with strong product portfolio catering to rural India and past and expected sales growth. Book value is Rs. 102 and market cap is 190 Cr against expected sales of 600 Cr for 09-10. Coming Quarter Q3 2010 could be much better than Q1 and Q2 due to post monsoon pick up in construction activities and recovery in Indian economy.
Recently in one report of Businessline management has indicated sales target of 750 Cr for financial year 09-10 which implies EPS of 25+.
Note: We have vested interest in above-mentioned stock. Our firm and our clients hold this stock as on day of writing and our firm and/or we personally and/or our clients may trade (buy or sell) in it in future.
Outlook and Valuation:
Everest Industries sells cement roofs and other building construction products for ceiling, wall, floor etc. Company also manufactures prefabricated steel structure which is another area we will see strong growth. Rural India and Low cost housing is favorite theme in market now days. In the coming months with growing construction activities in rural areas we could see strong earning growth from the company. Company showed annual sales jump of 85% for the year 08-09 compared to previous year giving an indication of growth we could see in coming years.
For the full year 09-10 Everest Industries could report sales of about 600 Cr and EPS of Rs. 20-22, which is discounted at PE of just 6 at CMP of Rs. 131 - low for a company with strong product portfolio catering to rural India and past and expected sales growth. Book value is Rs. 102 and market cap is 190 Cr against expected sales of 600 Cr for 09-10. Coming Quarter Q3 2010 could be much better than Q1 and Q2 due to post monsoon pick up in construction activities and recovery in Indian economy.
Recently in one report of Businessline management has indicated sales target of 750 Cr for financial year 09-10 which implies EPS of 25+.
Note: We have vested interest in above-mentioned stock. Our firm and our clients hold this stock as on day of writing and our firm and/or we personally and/or our clients may trade (buy or sell) in it in future.
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Please use your discretion before acting on the ideas expressed in the group.
Happy Trading,
United we grow!!!
Happy Trading,
United we grow!!!
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